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Issue #1610      September 11, 2013

Two-tier public health system is here

“Try this on. How does that feel? Is that comfortable?”

The elderly patient does up the leg brace with some help from the physio. “No it’s not, it hurts quite a bit,” is the response.

“OK, try this one, is that any better?”

“Oh that feels great,” says the patient.

“I think you’re right, it looks a much better fit,” the physio says. “But we will have to pay $70 if you take it, but the first one is free.”

“I’ll have to take the free one, I don’t have $70.”

“What about putting it on your credit card?”

So went the conversation, with the patient indicating that he cannot afford to put it on a credit card.

That was a scene in the plastering room of a public hospital in Sydney. Welcome to the two-tier health system. It has been developing for some time between public and private. Successive governments have starved public hospitals of funding, with the aim of forcing more people to take out private health insurance and use private hospitals. But, there is evidence that a two-tier system is operating within the public health system itself, with two levels of care according to ability to pay.

The development of two tiers within the public system is undermining Medicare and taking the system towards the US model. Abbott will speed up the process.

In that same hospital on another day, parents of a lively six-year-old with a broken leg were given the choice of a full-length (foot to knee) non-water-proof, heavy plaster or a light-weight, water-proof and coloured fibre glass cast. The catch was the first was free and the second, far more practical and comfortable for a kid, cost $40.

Public hospitals are ostensibly free. There is anecdotal evidence that charges are creeping in, while retaining free “basic” care with patients paying for anything over and above that.

This trend is not confined to the hospital system. While 82 percent of GP services are still bulk-billed, many in rural and regional areas have no access to bulk-billing GPs. The average out-of-pocket cost for fee-paying patients was $46.50 in 2012. (Figures from Australian Institute of Health and Welfare)

The fee-for-service system encourages rapid through-put, not sound medical practice. The failure of Labor and Liberal governments to adequately increase rebates to doctors who bulk-bill has added to this situation. It can result in quick fix solutions, such as another round of antibiotics. Primary and preventative health care can suffer as a result.

Under a salaried system, doctors are paid for the number of patients on their books and spend the necessary time with patients without a negative impact on their income.

Very few specialists bulk-bill and there are no restrictions on how much they can charge. Their fees are sustained at monopoly heights by Specialist Colleges that control the number being allowed to practise. The gap between a specialist’s fees and Medicare refund a patient receives can run into hundreds of dollars.

In 2004, the Howard government introduced a safety net, the Extended Medicare Safety Net (EMSN). When total gap payments for out-of hospital services in Medicare reach a certain threshold, the EMSN kicks in for the remainder of the year. The government then refunds 80 percent of the fee charged, regardless of how large it is. At present the threshold is $610 for low income families and $1,221 for families or individuals on higher incomes. (It is indexed annually.)

Although chronic illness is more prevalent in lower socio-economic suburbs, it appears that the wealthy are making greater use of it.

A study by the Mend Medicare Coalition* (MMC) found that “because accessing this safety net requires the ability to spend at least up to the threshold amount, this safety net has disproportionately advantaged those who live in wealthy electorates such as Wentworth in eastern Sydney, where $11 million in safety net benefits has been claimed over a 12-month period compared to only $460,000 in Braddon in less well-off northwest Tasmania.”

The number of patients who cannot afford prescription medicines is also on the rise. Again Labor and Liberal governments have been undermining the Pharmaceutical Benefits Scheme (PBS) with constant lifting of the basic charge. Pensioners and other health care card-holders have seen it rise from free to $5.90 a script. For those without a card, it has risen from $2.50 to a whopping $36.10 per script.

Access to prescribed medications is increasingly dependent on ability to pay. Unless public pressure is great enough, the Abbott government will further undermine the PBS and Medicare, making health care even more dependent on ability to pay.

“We need to have better preventative strategies to help people live healthier lives and we need to provide more access to primary care to help people better manage their chronic conditions and reduce the need for more expensive hospital stays,” the MMC says.

“Australia also needs to consider funding frameworks that go beyond our current fee-for-service model, which is focussed on through-put, and instead focus on health outcomes and delivering services that meet the needs of consumers.”

The Communist Party of Australia strongly supports a model where doctors are salaried, all services are free at the point of delivery and funded through centralised taxation revenue. Subsidies, such as the private health insurance rebate and Medicare rebates to the private hospital system and private practitioners should be phased out. The health system should be public, with universal access and quality care for all patients.

* The Mend Medicare Coalition comprises: the Australian Nursing and Midwifery Federation, Catholic Health Australia, Consumers Health Forum of Australia, the Mental Health Council of Australia, and the Public Health Association of Australia.

Next article – Community rally in support of public education

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